Nigeria’s naira depreciated for a second day as dollar sales by the central bank failed to meet investors’ expectations.
The currency of Africa’s biggest oil producer weakened 0.1 percent to 157.38 per dollar as of 2:30 p.m. in Lagos, the commercial capital, according to data compiled by Bloomberg.
Lenders bought the entire $150 million offered today, the Central Bank of Nigeria said in an e-mailed statement. The bank sells the U.S. currency at auctions on Mondays and Wednesdays to help stabilize the naira. The regulator sold $120 million on Jan. 30, the smallest amount in three auctions.
“What it sold today was lower than expected,” Kunle Ezun, a Lagos-based currency analyst at Ecobank Transnational Inc. said in a telephone interview. “Supply by the central bank isn’t enough to meet demand.”
Fuel imports are putting pressure on the naira “as the nation relies on imports to meet 70 percent of its fuel needs,” Access Bank analysts led by Tony Monye and Michael Ndiomu wrote in a note today.
The yield on the country’s 16.39 percent domestic bonds due January 2022 fell four basis points to 11.20 percent in the secondary market, according to Feb. 1 data compiled on the Financial Markets Dealers Association website. Borrowing costs on Nigeria’s $500 million of Eurobonds due January 2021 rose two basis points to 4.019 percent today.
Ghana’s cedi snapped three days of declines, gaining 0.1 percent to 1.9045 per dollar in Accra, the capital.